Strange Sony-Peters Partnership Reaches an End

After a rocky five-year marriage that cost hundreds of millions of dollars, Sony Pictures Entertainment has given producer Jon Peters his freedom.

Sony announced Friday that Peters will be allowed to work at other studios under a new, non-exclusive deal. The mercurial producer, who never fit into the corporate culture at Sony, is widely expected to go back to Warner Bros., where he scored his biggest hit with “Batman.”

Peters, 46, declined comment on his plans Friday. But a return to Warner would be seen as ironic, since Sony fought an expensive legal battle with the studio to obtain Peters and his former partner, Peter Guber, as co-chairmen in 1989. Sony paid more than $500 million in penalties to Warner for making the deal while Guber and Peters were still under contract there. In addition to that, it paid about $200 million for Guber Peters Entertainment Co.

Concerns about Peters returning to his old stomping ground reportedly complicated his exit talks. Sony had no comment on Friday, beyond a terse press release in which it said Peters will remain a “special and important member of its creative family.” Sources expect the studio to go ahead with such high-profile Peters projects as “Money Train,” possibly starring Wesley Snipes and Woody Harrelson, and “Gangland,” based on the life of John Gotti.

Much of the 12-member staff of Peters Entertainment will remain Sony-based. Peters also is on good terms with Guber and Mark Canton, chairman of Columbia-TriStar Motion Pictures Companies.

His departure ends one of Hollywood’s strangest partnerships. Much of the entertainment community was stunned when Sony Corp., the Japanese electronics giant, named Peters and Guber co-chairmen after buying the studio for $3.4 billion plus sizable debt. While Guber had executive experience, Peters was mostly known for his creative skills, having co-produced such hits as “Missing” and “Rain Man,” in addition to the enormously successful “Batman.”

As a former hairdresser and boyfriend of Barbra Streisand, Peters also had a reputation for being tight with talent--counting Michael Jackson and Jack Nicholson among his close friends--and for having a hair-trigger temper when it came to protecting his interests.

Sony tried to put a good face on its decision, even after the messy legal entanglement with Warner. But Peters never found his niche as an executive. He feuded frequently with Sony brass over everything from his ambitious movie ideas to his desire to build a Sony theme park.

Things reached an impasse by 1991, when Sony announced that Guber would become sole chairman, with Peters accepting a production deal. While Peters subsequently spent about $15 million developing “Gangland” and other high-profile projects, nothing reached fruition.

One project, “Mistress of the Seas,” fell apart over financial and creative disagreements. Others never moved forward. Sources say Peters was frustrated by Sony’s cautious attitude toward spending, especially in the wake of flops such as “Last Action Hero.” He also remained embittered about his earlier experiences, friends say.

“He came there to run the company, not to make movies,” said one source.

Peters is expected to spend the next several months lining up financing to support his new production company. Rumors that he will rejoin Warner are also fueled by the fact that he’s very friendly with Warner Bros. President Terry Semel. But sources say nothing has been formally decided, since Peters apparently wants to get back into filmmaking in a big way.